Evaluation of DoD Contracting Officer Actions on DoD Contracts Terminated for Convenience

Submitting OIG:

Department of Defense OIG

Date Issued:

Tuesday, May 9, 2023

Agency Reviewed / Investigated:

Department of Defense

Submitting OIG-Specific Report Number:

DODIG-2023-069

Location(s):

Agency-Wide

Type of Report:

Inspection / Evaluation

Questioned Costs:

Funds for Better Use:

Report updated under NDAA 5274:

View Document:

Attachment	Size
DODIG-2023-069.pdf	5.19 MB

Recommendation Number	Recommendation Status	Significant Recommendation
D-2023-2069-DEV0SO-0001-0001.A1a	Open	No
Rec. A.1.a: The DoD OIG recommended that the Defense Contract Management Agency Director review the contracting officers' decision to reimburse the contractors $9.2 million in termination costs and, based on the results of the review, take the necessary steps to recover any unallowable costs reimbursed to contractors.
D-2023-2069-DEV0SO-0001-0002.A2a	Open	No
Rec. A.2.a: The DoD OIG recommended that the Deputy Assistant Secretary of the Army (Procurement) review the contracting officers' decision to reimburse the contractors $6.8 million in termination costs and, based on the results of the review, take the necessary steps to recover any unallowable costs reimbursed to contractors.
D-2023-2069-DEV0SO-0002-0001.B1a	Open	No
Rec. B.1.a: The DoD OIG recommended that the Defense Contract Management Agency Director develop and implement a requirement to provide periodic training on the DoD Instruction 7640.02 reporting requirements to contracting officials involved in Contract Audit Followup system reporting with an emphasis on describing the DoD contracting officer's responsibility to maintain Contract Audit Followup records.
D-2023-2069-DEV0SO-0002-0001.B1b	Open	No
Rec. B.1.b: The DoD OIG recommended that the Defense Contract Management Agency Director develop and implement a requirement to provide periodic training on the DoD Instruction 7640.02 reporting requirements to contracting officials involved in Contract Audit Followup system reporting with an emphasis on entering accurate data in the Contract Audit Followup system data fields, including the Questioned Costs Sustained, Resolution Date, Disposition Date, and Status data fields.
D-2023-2069-DEV0SO-0002-0001.B1c	Open	No
Rec. B.1.c: The DoD OIG recommended that the Defense Contract Management Agency Director develop and implement a requirement to provide periodic training on the DoD Instruction 7640.02 reporting requirements to contracting officials involved in Contract Audit Followup system reporting with an emphasis on the importance of timely dispositioning audit reports within 12 months of the audit report date.
D-2023-2069-DEV0SO-0002-0003.B3a	Open	No
Rec. B.3.a: The DoD OIG recommended that the Deputy Assistant Secretary of the Navy (Procurement) to develop and implement a requirement to provide periodic training on the DoD Instruction 7640.02 reporting requirements to contracting officials involved in Contract Audit Followup system reporting with an emphasis on: 1. Describing the DoD contracting officer's responsibility to maintain Contract Audit Followup records. 2. Entering accurate data in the Contract Audit Followup system data fields, including the Questioned Costs Sustained, Resolution Date, Disposition Date, and Status data fields. 3. The importance of timely dispositioning audit reports within 12 months of the audit report date.
D-2023-2069-DEV0SO-0002-0003.B3b	Open	No
Rec. B.3.b: The DoD OIG recommended that the Deputy Assistant Secretary of the Navy (Procurement) to develop and implement procedures covering the record-keeping requirements in DoD Instruction 7640.02, Enclosure 3, paragraph (1)(b), "Reporting Requirements for Reportable Contract Audit Reports."
D-2023-2069-DEV0SO-0003-0001.C1b	Open	No
Rec. C.1.b: The DoD OIG recommended that the Defense Contract Management Agency Director revise Defense Contract Management Agency Manual 2501-06 to require that termination contracting officers estimate the funds required for a termination when contractors do not provide an estimate.
D-2023-2069-DEV0SO-0003-0001.C1c	Open	No
Rec. C.1.c: The DoD OIG recommended that the Defense Contract Management Agency Director provide final negotiation memorandums to the Defense Contract Audit Agency for the following nine audit report numbers ending in: 1. 2015P17100001 2. 2016F17100003 3. 2014P17100001 4. 2016G17100001 5. 2013B17100001 6. 2017H17100001 7. 2017H17100002 8. 2018P17100001 9. 2016C17100001
D-2023-2069-DEV0SO-0003-0003.C3a	Open	No
Rec. C.3.a: The DoD OIG recommended that the Deputy Assistant Secretary of the Navy (Procurement), develop and implement a requirement to provide periodic training to termination contracting officers that covers the requirement to estimate funds needed for settling the termination and recommend the release of excess funds.

Recommendation Number

Recommendation Status

Significant Recommendation

Additional Details

D-2023-2069-DEV0SO-0001-0001.A1a

Open

Rec. A.1.a: The DoD OIG recommended that the Defense Contract Management Agency Director review the contracting officers' decision to reimburse the contractors $9.2 million in termination costs and, based on the results of the review, take the necessary steps to recover any unallowable costs reimbursed to contractors.

D-2023-2069-DEV0SO-0001-0002.A2a

Open

Rec. A.2.a: The DoD OIG recommended that the Deputy Assistant Secretary of the Army (Procurement) review the contracting officers' decision to reimburse the contractors $6.8 million in termination costs and, based on the results of the review, take the necessary steps to recover any unallowable costs reimbursed to contractors.

D-2023-2069-DEV0SO-0002-0001.B1a

Open